1. GENERAL INFORMATION:
Ajanta Pharma Limited (the Company) is a public company domiciled
in India and incorporated under the provisions of the Companies Act,
1956. Its shares are listed on two stock exchanges in India. The
Company is engaged in the business of pharmaceutical and related
activities, including research.
(a) Terms/Rights attached to equity shares
The company has issued only one class of equity shares having a par
value of Rs 10 per share. Each holder of equity shares is entitled to
one vote per share. The company declares & pays dividend in indian
rupees. The dividend proposed by the Board of Directors is subject to
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31 March 2012 amount per share of dividend
recognised as distributions to equity shareholders was '' 7.50 (Pr.Yr.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the numbers of equity shares held by shareholders.
2. Contingent Liabilities:
Particulars 31 March 2012 31 March 2011
Rs in Lacs Rs in Lacs
i) Letter of Credit opened 1,813.51 1,529.44
ii) Guarantees given by the Bankers on
behalf of the company 2,018.31 1,900.25
iii) Guarantee given to banks for loan
availed by Ajanta Pharma (Mauritius) 763.05 Nil
Ltd. , wholly owned subsidiary
[USD 15 Lakh (Pr.Yr. USD Nil)]
iv) Income tax demands disputed by
Company pending in appeal. 369.18 379.92
Amount paid under protest Rs 182.00 Lacs
(Pr.Yr. Rs 80.00Lacs).
v) Sales tax demands disputed by Company
pending in appeal. 21.67 -
vi) Custom Duty on import under Advance
License Scheme, pending 132.62 58.39
fulfilment of Exports obligation.
vii) Estimated amounts of contracts
remaining to be executed on capital 2,363.08 1,322.60
account and not provided for,
net of advances
viii) Unpaid allotment money in
(a) Common Stock of Ajanta Pharma Inc.,
wholly owned subsidiary 75.29 65.99
equivalent to USD 1.48 Lacs
(Pr.Yr. USD 1.48 Lacs).
(b) Shares of Ajanta Pharma UK Ltd,
wholly owned subsidiary, 8.15 7.17
equivalent to UK Pound 0.10 Lacs
(Pr.Yr. UK Pound 0.10 Lacs).
Future cash outflows in respect of liability under clause (iv) to (vi)
is dependent on decisions by relevant authorities of respective
disputes, in respect of clauses (i), (ii), (iii) & (vii) liability is
dependent on terms agreed upon with the parties and in respect of
clause (viii) it is dependent on call made by investee company.
3. The Board of Directors have recommended dividend of Rs 7.50 (Pr.Yr.
Rs 5.00) per equity shares, which is subject to approval of
4. Disclosure of trade payables under current liabilities is based on
the information available with the Company regarding the status of the
suppliers as defined under the Micro, Small and Medium Enterprises
Development Act, 2006. Amount outstanding as on 31 March 2012 to
Micro, Small and Medium Enterprises on account of principal amount
aggregate to Rs 268.44 Lacs (Pr.Yr. Rs 117.42 Lacs) [including overdue
amount of Rs 60.16 Lacs (Pr.Yr. Rs Nil)] and interest due thereon is Rs
9.89 Lacs (Pr.Yr. Rs Nil) and interest paid during the year Rs Nil
(Pr.Yr. Rs Nil). As per the terms/ understanding with the parties, no
interest is payable and hence no provision has been made for the same.
5. The Company has one segment of activity namely Pharmaceuticals.
6. Employee Benefits
As required by Accounting Standard-15 â€˜Employee Benefits'' the
disclosures are as under :
6.1. Defined Contribution Plans
The Company offers its employees defined contribution plans in the form
of Provident Fund (PF) and Employees'' Pension Scheme (EPS) with the
government, and certain state plans such as Employees'' State Insurance
(ESI). PF and EPS cover substantially all regular employees and the ESI
covers certain workers. Contributions are made to the Government''s
funds. While both the employees and the Company pay predetermined
contributions into the Provident Fund and the ESI Scheme, contributions
into the Pension fund is made only by the Company. The contributions
are normally based on a certain proportion of the employee''s salary.
During the year, the Company has recognised the following amounts in
6.2. Defined Benefit Plans
Gratuity: The Company makes annual contributions to Employees'' Group
Gratuity-cum Life Assurance (Cash Accumulation) Scheme of LIC, a funded
defined benefit plan for qualifying employees. The scheme provides for
payment to vested employees as under:
6.2.1. On normal retirement / early retirement / withdrawal /
As per the provisions of Payments of Gratuity Act, 1972 with vesting
period of 5 years of service.
6.2.2. On the death in service:
As per the provisions of Payment of Gratuity Act, 1972 without any
6.3. Leave Encashment:
From the current year, employees are entitled for compensated absences
which are allowed to be accumulated and encashed as per the Company''s
rules and the same is being provided based on report of independent
actuary using Projected Unit Credit Method.
Accordingly Rs 223.80 Lacs (including towards current liability of Rs
24.68 Lacs) being liability as at the year-end for compensated absences
as per actuarial valuation has been provided in the accounts.
7. Employees Stock Options Scheme (''ESOS'')
The Company has instituted an Employees Stock Options Scheme 2011
(â€˜ESOS - 2011'') during the year which was approved by the
shareholders vide their resolution dated 1 July 2011. The Board of
Directors of the Company has granted 30,000 stock options to its
employees pursuant to the â€˜ESOS -2011'' on 24 October 2011. Each
option entitles an employee to subscribe to one equity share of the
Company at an exercise price of '' 10/- per share. Details of the
options granted during the year under ESOS-2011 are as under:
The Compensation cost of stock options granted to employees is measured
by the fair value method and is amortised uniformly over the vesting
The key assumption used in Black-Scholes model for calculating fair
value is: expected life of the option - between 1 to 3.2 years,
volatility - 96%, risk free rate of return - 8.5% and dividend yield -
8. Disclosure for operating leases under Accounting Standard 19-
The Company has taken various residential /godowns / office premises
(including furniture and fittings, therein as applicable) under
operating lease or leave and licence agreements. These are generally
cancellable and range between 11 months and 5 years under leave and
licence, or longer for other leases and are renewable by mutual consent
on mutually agreeable terms. The company has given refundable interest
free security deposits in accordance with the agreed terms. The lease
payments of Rs 344.65 Lacs (Pr.Yr. Rs 289.90 Lacs) are recognised in the
Statement of Profit and Loss under Rent under Note 29.
9. Excise duty related to differences between closing and opening
stock and other adjustments are stated under operating and other
expenses. Excise duty related to turnover is reduced from the Gross
Revenue from Operations.
10. In terms of the requirements of the Accounting standards-28 on
Impairment of Assets issued by the Institute of Chartered
Accountants of India, the amount recoverable against Fixed Assets has
been estimated for the period by the management based on present value
of estimated future cash flows expected to arise from the continuing
use of such assets. The recoverable amount so assessed was found to be
adequate to cover the carrying amount of the assets, therefore no
provision for impairment in value thereof has been considered
necessary, by the management.
11. As per the best estimate of the management, no provision is
required to be made as per Accounting Standard (AS) 29 Provision,
Contingent Liabilities and Contingent Assets as notified by the
Companies (Accounting Standards) Rules 2006, in respect of any present
obligation as a result of a past event that could lead to a probable
outflow of resources which would be required to settle the obligation.
12. Note on hedge and unhedged foreign currency assets and
The Company has entered into forward exchange contract, being
derivative instruments for hedge purpose and not intended for trading
or speculation purposes, to establish the amount of currency in Indian
Rupees required or available at the settlement date of certain payables
and receivables. Forward Exchange Contracts to sell USD 10 Lacs (Pr.Yr.
USD 45 Lacs) are outstanding as at the year end. The year end foreign
currency exposures that have not been hedged by a derivative instrument
or otherwise are as below:
13. The Company has not granted any loan/advances in the nature of
loans, as stipulated in the clause 32 of the Listing Agreement with the
Stock Exchanges. For this purpose, the loans to employees as per the
Company''s policy, security deposits paid towards premises taken on
leave and license basis have not been considered. Hence, there are no
investments by loans in the shares of the Parent Company and/or
14. Consumption of consumable stores is wholly indigenous in the
current and previous year.
15. Previous year''s figures are regrouped and recast wherever